ENERGY POVERTY IN SOUTH EAST EUROPE: SURVIVING THE COLD

ENERGY POVERTY IN SOUTH EAST EUROPE: SURVIVING THE COLD

EnErgy PovErty in South EaSt EuroPE:Surviving thE Cold

2

October 2016

Lead Author: Slavica Robić (DOOR, Croatia)

Lead Editor:Stefan Bouzarovski (Collaboratory for Urban Resilience and Energy, Manchester Urban Institute, University of Manchester, United Kingdom)

Contributors: Lira Hakani (EDEN, Albania)

Irma Filipović-Karadža, Tanja Jokić (CPI, Bosnia and Herzegovina)

Ivana Rogulj (DOOR, Croatia)

Vjosa Macula (ATRC, Kosovo*)

Sonja Risteska (Analytica, Macedonia**)

Sanja Orlandić (Green Home, Montenegro)

Lidija Kesar (Fractal, Serbia)

Additional Inputs: Garret Tankosić-Kelly (SEE Change Net, Bosnia and Herzegovina)

Pippa Gallop (CEE Bankwatch Network)

Petra Remeta (WWF Adria)

Dragana Mileusnić (CAN Europe)

Maja Božičević Vrhovčak (DOOR, Croatia)

Publication Manager:Masha Durkalić

Cover Design:Ana Lukenda

Typesetting and Layout:Ivan Hrašovec

We would like to thank all civil society organizations who contributed to the content of this report, including MAC-EF (Macedonia) and Center for Ecology and Energy (Bosnia and Herzegovina). We also extend our thank you to all vol-unteers who were involved in this project.

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of SEE Change Net on behalf of the SEE SEP implementing partners and can in no way be taken to reflect the views of the EU.

This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License. If you wish to use any data from this report for commercial purposes, please contact SEE Change Net.

Contents

Foreword by Dr Brenda Boardman:

Solving energy poverty is

a social and climate imperative 4

Context 6

Introduction 8

What is energy poverty? . . . . . . . . . . . .10

Who is vulnerable to energy poverty? . .12

A glimpse into energy poverty:

SEE country analyses 14

Methodology . . . . . . . . . . . . . . . . . . . .14

Albania . . . . . . . . . . . . . . . . . . . . . . . .15

Bosnia and Herzegovina . . . . . . . . . . . .18

Croatia . . . . . . . . . . . . . . . . . . . . . . . .22

Kosovo . . . . . . . . . . . . . . . . . . . . . . . .26

Macedonia . . . . . . . . . . . . . . . . . . . . .29

Montenegro . . . . . . . . . . . . . . . . . . . . .32

Serbia . . . . . . . . . . . . . . . . . . . . . . . . .35

The adverse effects of energy poverty in SEE 38

Getting out of the dark 42

Recommendations 46

References 48

* According to the UN, Kosovo is “under the United Nations Inter-im Administration Mission in Kosovo (UNMIK) established pursu-ant to Security Council Resolution 1244.” In this publication it is referred to as “Kosovo”.

** According to the UN, the official name for Macedonia is “The for-mer Yugoslav Republic of Macedonia”. In this publication it is re-ferred to as “Macedonia”.

3

South East Europe Sustainable Energy Policy Programme

With approximately 25 million potential new EU cit-

izens in South East Europe, who are all energy con-

sumers, energy is perhaps one of the most complex

issues which is facing the region. It has inter-related

and far reaching impacts on several areas, including

society, the economy and the environment, particular-

ly as South East Europe faces the imminent deregu-

lation of the market in a less than ideal governance

environment.

The South East Europe Sustainable Energy Poli-

cy (SEE SEP) programme is designed to tackle these

challenges. This is a multi-country and multi-year pro-

gramme which has 17 CSO partners from across the

region (Albania, Bosnia and Herzegovina, Croatia, Ko-

sovo, Macedonia, Montenegro and Serbia) and the EU,

with SEE Change Net as lead partner. It is financially

supported by the European Commission.

The contribution of the SEE SEP project is to empower

CSOs and citizens to better influence policy and prac-

tice towards a fairer, cleaner and safer energy future

in SEE.

Supported by

4

Solving energy poverty is a social and climate imperative

For over 40 years, there has been a recognition of the

problem of fuel poverty in the UK, and for a similar

period in Ireland and New Zealand. In winter, these

are not especially cold countries, but they are places

where historically there has been inadequate focus

on the energy efficiency of the housing stock. Hence,

for significant periods of the year, the cost of keeping

warm is considerable and beyond the ability of the

poorest households.

As the problem of energy poverty (effectively the same

as fuel poverty) has become recognized in other coun-

tries, it has been found to be present for the same rea-

sons: the combination of high fuel prices and energy

inefficient homes causes problems for people on a low

income. The result is fuel debt, cold homes, physical

ill, health and mental distress and a host of resultant

problems, such as children missing school and prema-

ture deaths among elderly people.

The fact that this is a growing problem, particularly in

Europe, is partly a result of this increased awareness

and partly – as demonstrated in this report – the re-

sult of ever-higher fuel prices as the market is liberal-

ised. Yet Governments have had a duty, under The uni-

versal declaration of human rights 1948, to ensure that:

Everyone has the right to a standard of

living adequate for the health and well

being of himself and his family.

During the cold, it is impossible to keep warm and

healthy in a space that is too expensive to heat on your

income. The implication, as the recommendations in

the report make clear, is for large-scale investment in

making the homes of the poor sufficiently energy ef-

ficient, so that they can afford to heat them. This is a

huge, but necessary challenge that requires a raft of

policies and considerable expenditure.

While the main focus is on heating, energy poverty

refers to all uses of energy in the home, whether for

lighting, washing, keeping food cold or whatever. It is

the household’s total energy bill that matters, so the

policies must encompass all the fuels and all the uses

of energy in the home.

In 2016, as the Paris Agreement is about to be ratified,

all countries have an added responsibility to curb their

emissions of greenhouse gases so that the world does

not ever warm up by more than 1.5oC. This is anoth-

er huge but necessary challenge that affects all house-

holds, not just those on the lowest incomes.

Fortunately, the solutions that help the fuel poor with

the energy efficiency of their homes are also those

needed to mitigate the effects of climate change: reduc-

ing the demand for energy, whilst preserving and en-

hancing the levels of service provided, is the first task

for policy. Then the required amount of low or zero

carbon energy supply is minimized. This sequence of

policy interventions is crucial, as all new sources of

clean energy have to be paid for through higher cus-

tomer bills and, hence, risk increasing energy poverty.

This report is, therefore, extremely timely. In its thor-

ough analysis of the situation in South East Europe

for the energy poor, it highlights for governments the

extent of the problem and the suffering caused. This

demonstrates clearly that interventions on vastly im-

proved energy efficiency in the housing stock have a

social as well as a climate imperative.

Dr Brenda Boardman, MBE, FEI

Emeritus Fellow, Environmental Change Institute

University of Oxford

Foreword by Dr Brenda Boardman, Emeritus Fellow, Environmental Change Institute

5

This report gives a glimpse into the everyday life of those

who are severely affected by adverse impacts of living in

energy poverty throughout South East Europe, while trying

to provide guidance for possible paths to solving the problem.

Tools and mechanisms that can provide immediate and much

needed assistance for many families are also discussed. It is

principally political will – the willingness to act and make a

difference – that is lacking.

The first part of the report (“Context”, “Introduction”) explains

what is energy poverty and energy vulnerability and what

are the specificities of the SEE region.

The second part of the report provides insights into everyday

life of the energy poor in the SEE region, based on findings of

field visits undertaken in all seven countries.

This is followed by a discussion of adverse impacts of energy

poverty – which are the most common effects of living in

energy poverty and what the main causes are.

The final part of the report (“Getting out of the dark”,

“Recommendations”) is focused on possible means and

mechanisms to prevent and alleviate energy poverty in the

SEE region.

Bosnia and Herzegovina

serBia

Hungary

romania

Bulgaria

greece

italy

slovenia

montenegro

kosovo

macedonia

alBania

austria

croatia

6

Context

The South East Europe (SEE) region – which for the

purpose of this publication is understood to consist

of Albania, Bosnia and Herzegovina, Croatia, Kosovo,

Macedonia, Montenegro and Serbia, has faced, and

is still facing, many difficulties in the energy sector.

These can be attributed to its recent turbulent history

resulting with infrastructural damage and the stagna-

tion or decline of national economies, on the one hand,

and the liberalization of energy sector related to EU ac-

cession, on the other.

Increases in energy prices and the shift to a liberalized

energy market pose a significant problem for many

households in the region. South East Europe is part of

the wider post-socialist region, which is especially vul-

nerable to energy poverty as a result of many years of

regulated and heavily subsidized energy prices and an

energy inefficient housing stock [1] [2] [3]. While energy

use per capita in the SEE countries is about half that of

the European Union (EU) (see Figure 1), the inefficien-

cy of building stock, household appliances and heating

systems means that the energy required to provide the

same comfort levels is much higher than in the EU [4].

Looking at electricity consumption for the household

sector per capita and per household it is evident that

households in the SEE are much more burdened with

unnecessarily high electricity consumption and thus

related costs (Figure 3). Because most of the region’s

electricity production originates from coal powered

power plants, excessive electricity use leads to a tre-

mendous environmental and health burden [6]. Kos-

ovo, the EU’s poorest country with record rates of un-

employment (see Figure 2) has the highest consump-

tion of electricity per household (Figure 3). This can be

Photo by:

Lasta Slaviček

Photography, 2015,

taken during the

field visits to energy

poor in Croatia

FIgurE 2 Unemployment rate in 2014 (combined 2014

data from national sources and Eurostat)

FIgurE 1 Energy use per capita in 2013. (Modified from [5])

7

attributed to its inefficient housing and household ap-

pliances stocks, coupled with high rates of electricity-

based domestic heating.

With the desire for further development, the require-

ments for energy are expected to increase significant-

ly for those households which are most affected by en-

ergy poverty, if no targeted measures are put in place.

At the same time, the region remains heavily depend-

ent on energy imports and with an energy inefficient

housing stock, heating systems and household appli-

ances [4]. The high reliance on imports, coupled with

the shift to a market-based energy sector without pro-

tection mechanisms in place, leads to increased prices

of energy. This hits the residential sector the hardest,

leaving the poor with limited means to decrease their

energy costs. They are forced to make decisions which

often leave them in dark, cold and damp homes.

Without funds available to invest in energy efficiency of their dwelling, to improve their heating systems, or to buy new household appliances, poor households are forced to give up on aspects of their basic living standards –decreasing living space in winter, turn-ing down the thermostat, using inade-quate heating, washing, cooking, light-ing and in warmer climates, cooling ser-vices. Many of those affected by ener-gy poverty in the Western Balkans are forced to deal with the ‘heat or eat’ dilemma, often giving up on much-needed energy to provide for food, or in harsh winter conditions, giving up on food to provide much needed heating.

1 Modified from [81] and combined with data on number of households from most recent census for every country.

This report gives a glimpse into the everyday life of

those who are severely affected by adverse impacts

of living in energy poverty throughout South East

Europe while trying to provide guidance for possible

paths to solving the problem. There is insufficient pub-

lic debate and awareness of the ever-rising problem of

energy poverty in the region, while the EU is trying to

make (too) slow steps in finding solutions, there is al-

most no recognition of the severity and magnitude of

energy poverty prevalence in South East Europe.

This report aims to focus the debate on those who are in greatest need, and to stress that there are tools and mecha-nisms available to provide immediate and much needed assistance for many families. It is principally political will – the willingness to act and make a differ-ence – that is lacking.

FIgurE 3 Comparison of electricity use in

households sector per capita and per household1

Electricity use in household sector per capita

0

500

1000

1500

2000

2500

EU 28A LB BIHH RK SV MK MNES RB

kWh/

pers

on/y

ear

Electricity use in household sector per household

01000

20003000

40005000

60007000

80009000

1000 0

EU 28A LB BIHH RK SV MK MNES RB

kWh

/ho

use

ho

ld/y

ear

EU 28 ALB BIH HRK KSV MK MNE SRB

EU 28 ALB BIH HRK KSV MK MNE SRB

8

IntroductionThe South East Europe (SEE) region has faced many

difficulties in the energy sector as result of its turbu-

lent history, which has resulted in infrastructural dam-

age and the stagnation or decline of national econo-

mies. It is commonly falsely assumed that energy pov-

erty has the same characteristics across the region, re-

gardless of cultural, climatic or political conditions.

Through practice and research it has been shown that

regional and historical differences play a significant

role in the prevalence and characteristics of energy

poverty [7]. The adverse effects of energy poverty are

particularly evident in in South-East Europe.

Energy price rises pose a significant social and politi-

cal issue in the whole of Europe [1]. The shift to a lib-

eralized energy market, without protection mech-

anisms in place, has been particularly burdensome

for people in the countries which have already start-

ed the liberalization process, making them vulnerable

and lacking tools for coping with price increase as a

result of many years of regulated and heavily subsi-

dized energy prices and non-efficient housing stock [1]

[2] [3] [8]. Although prices in SEE are still significantly

lower than in EU (as shown on Figure 4) with remov-

al of state regulation and shift to a liberalized energy

marked increases in prices can be expected and they

are likely to create significant problems in covering ba-

sic energy needs [3], [2], [9], [10]. Liberalization process

is not a problem by itself, however, it has to be imple-

mented with adequate protection mechanisms to a en-

able smooth transition.

If the current trends continue it is likely that market

liberalization and removal of price control mechanisms

will close the „price gap” (Figure 4). As result, without

adequate protection for vulnerable groups and signifi-

cant investment in energy efficiency, many people will

FIgurE 4 Electricity prices for households in Western Balkans compared to EU prices

for the period 2013-2015 in Eurocents per kWh (Modified from [11]).

Electricity prices for domestic users (2013-2015)

4,50

6,50

8,50

10,50

12,50

14,50

16,50

18,50

20,50

22,50

2013 2014 2015

Euro

cent

/kW

h

EU

HRV

MNE

MKD

ALB

SRB

BIH

KSV

Price gap

9

be pushed into energy poverty. This would lead SEE to

an unsustainable, unhealthy and dangerous future.

Living in energy poverty has prov-en adverse impacts on health, ranging from the high prevalence of pulmonary disease to excess winter deaths and poor mental health2 [12] [13] [14] [15].

While it has long been acknowledged that continuous

increases in energy costs drive many families into en-

ergy poverty, particularly when it is combined with in-

efficient housing stock, old household appliances and

low income, there have been only limited efforts to im-

plement protection systems for the vulnerable in the

SEE. Affected families are forced to choose between

food and basic energy services. As a result they often

resort to living in inadequate conditions and shifting

to alternative fuel. Most common fuel switching is to

biomass (fuelwood), which, although it is more benefi-

cial in terms of carbon emissions and pricing, is start-

ing to pose a serious threat to regional forests because

of poor control mechanisms, illegal logging and fuel-

wood sales.

Deforestation is an increasing problem in the whole of South East Europe. Gov-ernments’ inability to address energy poverty in South East Europe is increas-ing the threat of deforestation, as ille-gal logging is seen by vulnerable people as their only chance for surviving harsh winters [16].

2 These are deaths which are directly related to the cold weather. These are people who generally have underlying health prob-lems but would not have been expected to die during this pe-riod. [82]

Throughout more than thirty years of research in

the field of energy poverty, attempts have been made

to provide a comprehensive definition of vulnerable

groups and universal definition on energy poverty,

however no consensus has been reached on how to

measure the prevalence of energy poverty or how to

explicitly define vulnerable groups,. What is more im-

portant is that there is no comprehensive guidance on

how specific countries or regions should approach this

issue.

With the EU unable to provide a defini-tive solution or at least clear guidance how to fight this problem, it should be in the interest of governments of the most affected countries, those in SEE, to take their own initiative and lead by example as this is the only way to pro-vide a sustainable, healthy and econom-ically stable future for their citizens.

10

Energy poverty factors

What is energy poverty?Defining energy poverty has caused and still is causing

numerous debates [17] [18] [19] [20] [21] [9] [22] [23].

Energy poverty, in general terms, rep-resents the inability of a household to secure adequate amounts of energy in the home – allowing it to keep living spaces adequately warm and well lit, to have access to a needed range of energy services, and to be able to afford a suf-ficient amount of energy for everyday requirements.

What is difficult to define is what “adequate” is. Ade-

quate heating can be, and often is, defined as the op-

timal temperature for health, which is according to

the WHO 21 degrees Celsius in the living rooms and

18 in other rooms. However, much of the perceived

comfort is culturally determined which makes pre-

cise definition difficult. Energy poverty is a complex

issue, in which many factors which determine wheth-

er a family will be facing adverse impacts (Figure 5).

Understanding energy poverty is central to any efforts

to alleviate it. This requires a structured approach to

the manner in which energy poverty is defined, meas-

ured, monitored, recorded and reported [24].

Defining energy poverty in a way that could be meas-

ured and monitored is a challenging task requiring

extensive research [25]. There is no all-encompassing

EU definition [21], only a limited number of EU mem-

ber states have official definitions of energy poverty

[9], while at the same time it is estimated that some

11 per cent of the EU population is energy poor [26].

Some definitions see energy poverty as lack of access

to modern energy services – electricity and clean cook-

ing sources [27], [28]. Energy poverty is also seen as the

inability to keep heat the home to socially – and ma-

terially-necessitated level, which has been developed

based on the assumption that poverty is “a lack of ac-

cess to resources and denial of opportunities” [25]. In

the SEE public and political discourse on energy pov-

erty Boardman’s definition is commonly used, which

states that a household is energy (fuel) poor if it needs

to spend more than 10 per cent of its income on energy

costs in order to keep the home adequately warm3 [29],

3 Adequate indoor temperatures are defined as 21 degrees Celsius in living rooms and 18 in other rooms according to the WHO standard from 1987.

FIgurE 5 Factors describing

energy poverty

Energy factorsEconomic and

socio-demographic factors

Health:

• Mental• Physical

Energy class estimate and illustrative indicators:

• Insulation• Damp• Mould• Draft• Heating system

Energy services:

• Heating• Cooling• Domestic hot

water• Cooking• Lighting• Washing• Other

Demographics of household members:

• Number• Gender• Age

Financial aspects:

• Income• Energy

expenditures

11

[30]. It is important to clarify that Boardman’s defini-

tion uses modelling to determine the needed amount

of energy and related costs, not actual reported data.

In the SEE region, this has commonly caused misin-

terpretations in the media and in high level debates

on energy poverty, where it is often falsely interpret-

ed as an absolute 10 per cent threshold based on the

actual bills and monitored energy consumption. Ener-

gy poverty estimates based on such assumptions are

problematic.

Boardman’s definition was used in the UK for national

statistics and monitoring of energy poverty until 2013

when much of the country shifted to the Low Income

High Cost (LIHC) approach. The LIHC method consid-

ers a household to be energy (fuel) poor if it has en-

ergy costs above average and if the income which re-

mains at the household’s disposal after paying for its

energy costs, would push the household below the of-

ficial poverty threshold. The main difference to Board-

man’s definition is that LIHC compares the national

average of costs and income, taking into consideration

the number of household members who have low in-

comes and high energy costs, and the depth of energy

poverty in those households.

An increasing body of research shows that different

combinations of indicators should have a role in the

evaluation of energy poverty [9], [31], [32]. As for SEE,

although there is no clear definition nor national sta-

tistics available focusing on energy poverty, it is clear

that many households are living in substandard and

inadequate conditions as result of their inability to

pay their energy bills or invest in energy efficiency

improvements.

The faces of energy poverty in Balkans are those of

extreme hardship and immediate action is needed re-

gardless of the exact definition of energy poverty or

its threshold.

While waiting for science to come up with an applicable definition to ena-ble the measurement and monitoring of the problem, it is necessary to design and implement measures for protecting the most vulnerable.

FIgurE 6 Unsuitable living conditions in SEE

(Photo by Lasta Slaviček Photography)

12

Who is vulnerable to energy poverty?Current practice defines specific groups which are vul-

nerable and more likely to be energy poor and focuses

policies them. Good targeting of policies per specific

vulnerable group is the key to success.

Vulnerable groups are those who, according to the economic and socio-demographic and energy indicators linked to their households, have a high-er probability of becoming energy poor than the general population.

For example, it has been determined that recipients of

social welfare are significantly more often energy poor

than the average, and that single parent households

are more likely to be energy poor than two-parent

ones. Pensioners are more commonly energy poor

than employed persons [32], [33], [34] [35]. Older people

are commonly affected by energy poverty as they may

require more home heating than others for physiologi-

cal reasons and they spend most of the time at home,

unlike the employed population [33]. This group is also

most affected by excess winter deaths. Older, disabled,

ill and single parent families are more likely to be en-

ergy poor than general population.

At the same time it is important to bear in mind that

belonging to a certain vulnerable group does not nec-

essarily mean that a person or a family is energy poor.

Although retired people have difficulties in covering

their basic energy needs – often due to low incomes

and the age of the housing stock – there are many who

are retired and well off. It is important to bear that

in mind when designing policies and mechanisms,

13

because imprecise targeting may lead to inefficient

use of the state budget and not achieve the desired

impacts.

While SEE governments are struggling to align their

policies with the EU acquis, the EU provides no clear

guidance on how to deal with energy poverty or the

vulnerability issue. With the European Commission

recognizing the fact that the problem of energy pov-

erty is on the rise and that there is still no clear frame-

work, a Working Group for Vulnerable Consumers was

established in 2013. The Working Group was formed

with the goal of performing a qualitative and quanti-

tative review of different aspects of vulnerability and

to give recommendations for defining vulnerable con-

sumers in the energy sector [10]. It concluded that it is

not possible to have a unified definition of vulnerable

consumers which would apply to the entire EU.

As for the EU acquis, the idea of energy poverty came

into the EU legal framework for the first time via the

so-called “Third Energy Package” when the protec-

tion of vulnerable energy consumers was first defined

with the goal of reducing energy poverty. On the ba-

sis of the EU Internal Market in Electricity (2009/72/

EC) and Natural Gas (2009/73/EC) Directives, member

states must define energy poverty and protect vulner-

able energy consumers. The Internal Market in Elec-

tricity Directive (2009/72/EC) states that energy reg-

ulators should be empowered to contribute to ensur-

ing a high standard for universal and public servic-

es in compliance with the open market, protection of

vulnerable consumers, and fully efficient measures of

consumer protection. The Energy Efficiency Directive

(2012/27/EU) states that member states should be ena-

bled to include, within their own national systems of

energy efficiency obligations for communal energy en-

terprises, demands in relation to the realization of so-

cial goals – – specifically in order to ensure access to

greater energy efficiency to vulnerable consumers. It

is now up to each government to find their own way to

deal with this complex issue.

In an attempt to highlight the severity of the problem of energy poverty in SEE and to illustrate hardships affected fam-ilies are facing, analyses were undertak-en in all seven countries. As data is in some cases very limited due to financial limitations, these analyses can only pro-vide limited results. However, while it is impossible to establish the precise mag-nitude of the problem, or to pinpoint all of the affected households based on these results, they are nevertheless indicative of the severity of the problem and a represent an urgent call for imme-diate action.

FIgurE 7 Left: A typical SEE family

house conducive to energy poverty

– no insulation and single glazing;

Right: Fuelwood stove heating (Photos

taken in Croatia during the field visits)

14

A glimpse into energy poverty: SEE country analyses

MethodologyThe data used for the country reports presented here

have been obtained through the projects “Reduce en-

ergy use and change habits, REACH”4, REAC CEI, “With

knowledge to warm home”5 and South East Europe

Sustainable Energy Policy (SEE SEP). In order to an-

alyse energy poverty in the seven countries a review

of national legislation was undertaken for each coun-

try, in addition to a desktop study of existing research.

In an attempt to highlight the severity of energy pov-

erty, and to illustrate hardship, a series of field visits

to affected households were undertaken. Subject to

available funding, in some countries (Croatia, Bosnia

and Herzegovina, Macedonia, Montenegro) a ques-

tionnaire was used to gather data on energy consump-

tion habits, and provide insights into the difficulties

energy poor face. In other countries, as result of lim-

ited funding, fewer households were visited so as to

illustrate problems that are commonly seen among

the energy poor (Albania, Kosovo and Serbia). The re-

spondents targeted were either those who receive

compensation and/or receive social welfare support.

Overall, 833 (Albania N=10, BiH N=103, Croatia N=397,

Kosovo N=10, Macedonia N=206, Montenegro N=97,

Serbia N=10) households were visited throughout the

SEE region, providing valuable qualitative and quanti-

tative insights into the severity and experience of en-

ergy poverty. Out of 833 households visited, complete

and comparable data was collected for 612 households.

This was used for highlighting the overall situation in

the region.

The first part of the questionnaire relates to the health

and economic status and socio-demographic aspects

of the households visited, while the second part of

the questionnaire relates to the energy aspects of

the dwelling in which they live. In the context of the

4 www.reach-energy.eu, Co-funded by the Intelligent Energy Europe Programme of the European Union.

5 Funded by the European Union through European Social Fund and Government of the Republic of Croatia Office For Cooperation with NGOs.

health-status part of the questionnaire, questions were

designed to cover the health-related behaviours of us-

ers, their health status and self-assessment of person-

al health. The questionnaire comprised basic economic

and socio-demographic indicators that are relevant to

research related to health outcomes – age, gender and

education. The second part of the questionnaire relat-

ing to the energy aspects of households includes basic

information about the household electricity consump-

tion, water consumption, the consumption of thermal

energy and the general conditions of relevance in the

context of energy poverty, such as temperature, damp

and mould in the household.

It is important to note that certain estimates have

been made for the calculations. Data on electricity

consumption was collected through energy bills, how-

ever, in cases when respondents did not have bills

available, a calculation was made based on the price of

the monthly bill they reported. For heating, as most of

the households use wood, they reported the consump-

tion in cubic metres. Heat consumption was calculated

based on the assumption that 1srm=1.575 kWh.

All respondents were provided with and implemented

simple energy efficiency measures (LED lightbulbs, re-

flective foils for radiators, timers for electrical boilers,

draught proofing for doors and windows and water

pearlators). Through inexpensive measures the goal

was to improve the quality of life and reduce energy

consumption. All visited households members were

advised on the efficient use of energy directly by the

field-workers and through brochures and leaflets. The

actions taken resulted in annual energy savings in the

2-8% range, with water savings higher than 10%. Given

the low income levels in relation to high energy costs,

those savings offer relief while somewhat improving

living conditions going beyond energy.

All respondents from the quantitative and qualitative

research sections were asked to give informed consent

to participate in the research and their identities were

anonymized, while data is presented in an aggregate

manner.

15

Albania

General information

After transport, the building sector in Albania has the

highest final energy consumption. The total final en-

ergy consumption for the period 2005-2012 in the res-

idential sector of Albania shows that for households

the main energy source is electricity (45%), followed

by biomass (38%). Albania has a high unemployment

rate of 19% which has been continuously growing. In-

adequate access to energy services is a common is-

sue in Albania where just above 40% of households

have cooking appliances, water heating and other

electric appliances. 11.2% of connected households

are late with paying their bills and 20.7% have inade-

quate heating. It is also important to note that 12.5%

of households have damp walls, floor or basement and

7.7% have a leaking roof [36]. All those numbers high-

light the severity and prevalence of inadequate access

to energy services in Albania.

Vulnerability and energy poverty in national legislation

Similarly as in other SEE countries, energy poverty in

Albania is not clearly defined and systematically mon-

itored. There are no specific policies in place designed

to alleviate energy poverty. Vulnerability is addressed

through different energy and social policies. The Al-

banian Law on the Power Sector (OG 43/2015) defines

a vulnerable customer (Article 3) as a household con-

sumer who due to social reasons, in special conditions

and by definition of this law, is entitled to certain spe-

cial rights regarding the supply of electricity. The vul-

nerability criteria are, according to Article 95, deter-

mined by the Ministry of Social Affairs in cooperation

with the Ministry for Energy and Ministry of Finance

together with the state Energy Regulatory Entity. The

following criteria are taken into account for acquiring

vulnerability status:

• customers with low income, who use electricity to

supply their permanent residence;

• customers who consume electric power supplied

through single-phase grid with maximum power

of 16 Amperes;

• maximum level of energy consumption per per-

son reflecting seasonality;

• manner of direct support by the Government

budget;

This is in line with guidance provided in the Social

Strategy in the Energy Community (2013), and follow-

ing basic guidance provided in the Social Action Plan

on the implementation of the Memorandum of Under-

standing on Social Issues of the Energy Community

from 2010 (SAP). The SAP was the first document re-

quiring protection of “socially vulnerable consumers”

within the energy sector. This was one of the key com-

ponents of SAP, with the following activities aimed at

its realization:

FIgurE 8A Inefficient walls in Albania

(taken in Tirana in 2016 during household visits)

16

• Analysis of existing legislative study on protec-

tion mechanisms

• Criteria on definition of socially vulnerable ener-

gy consumers

• Analysis of existing mechanisms for poverty to

define indicators of poverty related to energy use

Some of the steps have partially been undertaken (i.e.

criteria on definition of vulnerable consumers), how-

ever, no thorough protection has been put in place and

publicly available data on results of foreseen analysis

is scarce so it is questionable whether, and to which ex-

tent, have they been undertaken.

According to the aforementioned Law on the Power

Sector, once defined, vulnerable consumers are listed

in a register under the authority of the Ministry of So-

cial Affairs. The register is shared with the distribution

system operator and with electricity suppliers. The

registry defines vulnerable customers who can have

subsidies on their electricity bills. Article 96 ensures

universal access to electricity supply to those who ac-

quire “vulnerable” status and who are listed within the

registry.

Starting with January 2015 the price for households is

9.5ALL(0.072 EUR )6/ kWh. Prior to this regulation the

households that consumed less than 300 kWh paid 7.7

ALL (0.056 EUR)/kWh and those who used more than

300 kWh paid 12.5 ALL (0.091EUR)/kWh. Following this

regulation, in mid-January 2015 an additional mecha-

nism for protection of vulnerable customers was set

up; it provides compensation of costs due to chang-

es in prices of electricity to those who use up to 300

kWh though a monthly deduction of 648 ALL (4.7 EUR)

from their electricity bills if they meet the vulnerabil-

ity criteria.

Unlike the old law, which differentiated prices for all

consumer groups solely based on their consumption

level, this approach is more socially sensitive while try-

ing to provide relief to those in need. Eligible for this

benefit are: a) households that receive social aid, and

6 9.5 ALL= 0.069 EUR ( 1 EUR =137.5)

families that have members with disabilities, declared

unable to work; b) heads of families, that are benefi-

ciaries of a state invalidity pension and are beneficiar-

ies of invalidity pension in village and do not have oth-

er members of their family employed or self-employed;

c) heads of families, who benefit from a state retire-

ment pension or who benefit from a retirement village

pension, but they live in a city and do not have family

members employed or self-employed; d) families with

a member employed in state institutions, with month-

ly gross salaries under 35,000 (thirty five thousand

ALL) (253.75 EUR); e) legally blind f) persons with par-

aplegia and tetraplegia. This criterion is aligned with

the Act on Social Assistance and Services (9355/2005)

and Law on the State Budget (160/2014).

The Law on the Natural Gas Sector defines a vulnera-

ble customer as a customer who, based on his income,

cannot afford the price of gas and thus benefits from

Government subsidies. This definition needs to be re-

fined. Furthermore, the Ministry in charge of the en-

ergy sector is obliged to develop programmes for pro-

tection of vulnerable customers in cooperation with

other authorities [37].

The National Energy Efficiency Action Plan 2010-2018

has foreseen a subsidy scheme for comprehensive re-

furbishment of multi-family residential buildings,

which could provide assistance to vulnerable groups

if drafted in a manner which takes into consideration

vulnerability criteria.

A glimpse into reality

Given the lack of a comprehensive data on levels of en-

ergy poverty in Albania and the need for understand-

ing the potential causes and consequences of Albanian

energy poverty, 10 households were visited in the cap-

ital Tirana. The household’s contact details were ob-

tained through Caritas Albania. All but one of them

lived in a house without any insulation, with single-

glazed windows.

17

The average monthly income of the households vis-

ited is around 150 EUR for a whole household, which

on average had 4 members. Most of the interviewees

were ready to move to another home if it would enable

them to save energy and money which is indicative of

the inadequate living conditions they are faced with.

When it comes to health, most were faced with long

term illness, chronic illness or disability and they re-

ported that their health problems influence social ac-

tivities with family and friends.

The average monthly electricity bill is 39 EUR in winter

and 22 EUR in summer7. The respondents noted that

they used electricity for space heating and for domes-

7 Most of the families were paying a fixed tariff in winter and in summer. The persons that were interviewed most of the time were not directly involved in paying the bills, so the actual costs may differ.

tic hot water heating. All of the visited families had a

gas stove as well. It was difficult to correctly calculate

how much gas they were spending and how long a gas

bottle lasts, as the families were using bottles of dif-

ferent capacity and they were unable to estimate how

much gas they use within a year. Some of the families

were not paying for their water bills, and the greatest

difficulties reported were encountered in paying elec-

tricity bills. For water heating in the kitchen and bath-

room they were using mainly big electric boilers. It is

also important to note that as a result of inefficient

and old windows and doors, draught is an evident

problem. Another issue recorded and discussed with

the households visited was mould which was evident

in some or most of the rooms. Members of the house-

holds visited complained that air quality was not good

as it was too damp, and during the winter time they

stressed that it is often too cold as they are unable to

heat their rooms to comfortable levels.

Key steps for Albania• Broaden the scope of measures for protection of

the vulnerable to include energy efficiency meas-

ures, which should have priority;

• Define energy poverty to enable monitoring of the

measures implemented;

• Provide publicly accessible statistics on energy ex-

penditures and living conditions.

FIgurE 8B Inefficient heating systems in Albania

(taken in Tirana in 2016 during household visits)

18

Bosnia and Herzegovina

General information

The Dayton Peace Agreement of 1995 established a

new constitution for Bosnia and Herzegovina. Bosnia

and Herzegovina was established as a state made up

of two Entities, the Federation of Bosnia and Herze-

govina and Republic Srpska. The Brčko District is un-

der the direct jurisdiction of the State administration

[38]. Energy prices were traditionally set by the Gov-

ernments of the Entities and kept artificially low, es-

pecially for households for social reasons. This ap-

proach is now undergoing change. Residential build-

ings are the largest single consumers of energy and a

major source of greenhouse gases [39]. Current con-

struction standards are lagging behind EU levels, and

old building stock is inefficient and deteriorated. More

than 83% of the population lives in family buildings

with an average of 3.1 family members [40]. Although

most households (93%) have washing machine, they

are mostly (65%) older than 6 years, with 27% being

older than 10 years [40]. The situation is even worse

with freezers which are commonly older than 10 years

(42.5%) and fridges, 32.3% older than 10 years. Statis-

tics indicate that household appliances are old and in-

efficient and heating systems, especially in rural are-

as, rely on individual stoves commonly heating just

one room. The BiH administration has undertaken

some attempts in protecting vulnerable groups, how-

ever, the complex administrative constitution cou-

pled with economic difficulties has led to slow adap-

tation of national legislation in many segments, and

is far behind schedule. However, some progress has

been made regarding the protection of vulnerable en-

ergy consumers.

FIgurE 9 Gathering data on energy and health

conditions in a vulnerable household in BiH

19

Vulnerability and energy poverty in national legislation

Following the same trend as other countries from the

SEE region, that are parties to the Energy Communi-

ty, the first requirement to protect vulnerable energy

consumers was made within the Social Action Plan

(SAP, OG 79/2010). One of the key activities under the

SAP is development of a programme for helping social-

ly vulnerable households – electricity consumers. The

basic suggested criteria are to define vulnerable ener-

gy consumers as those who are recipients of social wel-

fare, based on a material census of welfare users and

their income. Those who are defined as vulnerable en-

ergy consumers should be eligible to receive discounts

on specified amounts of electricity consumed. The so-

cial care centres should deliver lists of eligible custom-

ers to the electricity suppliers who then request funds

for discounts from the Ministry of Finance. The same

model has been suggested for gas consumers.

Energy efficiency is listed as an important tool for the

protection of vulnerable consumers within the SAP;

it is recommended to be used as a social welfare ser-

vice. The emphasis is on educating energy consumers

about the benefits of rational energy use, by using sim-

ple awareness raising methods such as brochures and

leaflets, and low cost energy efficiency measures, such

as replacing lightbulbs with energy efficient ones. It

is concluded that realization of the activities and rec-

ommendations listed in this document is in the inter-

est of BiH, however, it is also noted that the fiscal situa-

tion limits possibilities for the implementation of new

measures to be financed from the state budget. The

SAP is foreseen as a minimum which the state should

achieve, and competent authorities are invited to un-

dertake additional efforts aligned with the basic guid-

ance provided within the SAP.

The electricity laws in the Federation of Bosnia and

Herzegovina and Republic Srpska fail to fully trans-

pose the customer protection provisions of Directive

2009/72/EC, and have not at all transposed provisions

related to vulnerable consumers by Directive 2009/73/

EC. The Brčko District legal framework does enforce

protection of customers under general public service

[41]. The regulatory acts, such as general conditions for

electricity supply and the rules for supply of eligible

customers, in all three jurisdictions promote custom-

er protection in terms of conditions for disconnection,

complaints and information rights. The existing legis-

lation of the Federation defines protected customers

and provides obligations for the supplier of tariff cus-

tomers (although tariff customers should have ceased

to exist by 1 January 2015) as a manner of customer pro-

tection, but allows discrimination between customers

through price regulation [42]. Transposition of direc-

tives in general remains fragmented and asymmetrical.

FIgurE 10 Building type and number

of household members for households

visited in Bosnia and Herzegovina

Building type

88%

12%

Family house

Apartment

20

The first binding document dealing with vulnerable

energy consumers on the state level was the Electrici-

ty Act (OG 66/13) which states that energy policy needs

to provide a programme for the protection of vulner-

able energy consumers (Article 5), and that this pro-

gramme needs to protect vulnerable consumers from

disconnections and provide protection in remote areas

(Article 13). Based on the requirement set in the Elec-

tricity Act, in June 2015 the Commission for the De-

velopment of a Programme for the Protection of Vul-

nerable Household Electricity Buyers was formed (OG

51/15). The Commission has the task of defining activ-

ities which can be implemented with the aim of pro-

tecting socially vulnerable categories of electricity

consumers, to protect vulnerable consumers from dis-

connections, to ensure protection in remote areas and

to find mechanisms for the social protection of poten-

tial surplus employees during reforms in the energy

sector.

The Law on Transmission of Electric Power, the Regu-

lator and Electricity Market was drafted in 2014. Arti-

cle 16 requires protection of vulnerable consumers in

terms of ensuring that consumers benefit through the

efficient functioning of the electricity market, promot-

ing effective competition as well as transparency re-

garding contractual terms and conditions, general in-

formation, dispute settlement mechanisms, and easy

switching to a new supplier.

In 2007, the Republic Srpska Government adopted a

wider, systematic programme with measures aim-

ing to protect socially vulnerable categories, a Pro-

gramme for the protection of Socially Vulnerable Cat-

egories of Electricity Consumers with subsidies for 150

kWh of electricity per month, which was implement-

ed in 2008, 2009 and 2010. There were between 28,000

and 35,000 eligible consumers. In 2011 and 2012 there

were no funds provided for electricity buyers. To se-

cure funding for further support the National Assem-

bly requested that the Government of Republic Srp-

ska, within a timeframe of six months analyses and

suggests a mechanism for using the profit of the elec-

tricity utility for electricity subsidies for the socially

most vulnerable consumers. This has resulted in se-

curing 8.6 million KM (4.3 million EUR). In 2012 120kWh

per user were subsidized monthly, increasing to 167 in

the last three months of 2012.

Republic Srpska has also adopted a Strategy for the

Development of the Energy Sector until 2030 (01-

794/09) with the first aim of ensuring the provision

of an adequate quantity and security of supply for all

needed energy services, taking into consideration the

protection of vulnerable consumers. The second key

aim is to increase energy efficiency in all segments of

the energy sector, especially in buildings.

Heating Source

40%

1%30%

2%

3%

1%

1%

22% Coal and fuelwood

Gas

Fuelwood

Electric ity

Pell ets

Gas and fuelwood

No data

FIgurE 11 Heating type in

the households visited in BiH

21

A glimpse into reality

A survey on a sample of N=97 households was under-

taken in summer 2016 in the vicinity of Tuzla, based

on social status. Suggestions for interviewees were re-

ceived from civic’ associations (a pensioners’ associa-

tion, women’s association, local communities etc.). The

residents of the selected households were people with

lower income (mostly retirees)8. 88% of the respond-

ents lived in family houses (in line with the state aver-

age of 83%) with a living area of about 80 square me-

ters (state average 86m2) and have on average 2.9 fam-

ily members (state average 3.1). On the state level a bit

more than 51m2 of the average 86m2 living space is

heated during the winter periods [40], indicating that

many families are forced to reduce their living space as

a result of inability to afford adequate heating.

More than half of the families visited live in dwellings

older than 36 years, with partial insulation or none at

all and inefficient windows (old and often only with

single glazing). The main heating sources of the re-

spondents are wood and coal, and on the state level

most households have individual sources and types of

heating, furnaces and “split systems” (73%) [40].

Most survey respondents indicated the occurrence

of draught through windows and doors, which in

8 Field visits were undertaken within the project REACH CEI by The Center for Ecology and Energy Tuzla http://www.ekologija.ba/

addition to having adverse impacts on health (as a con-

tinuous flow of cold air leaves the lower parts of rooms

permanently cold) it also indicates high energy losses

as a result of inefficiency. Most respondents in BiH did

not report any occurrence of mould (Figure 12).

On average the surveyed households consume

3,975kWh of electricity annually (state average

4,568kWh [40]) on which they have to spend about 9%

of total household income (monthly average income of

the households visited is 321 EUR). Most of the freez-

ers and washing machines are older than 10 years [40]

contributing to inefficient energy use and increased

energy costs.

Key steps for Bosnia and Herzegovina• Alignment of state legislation with the EU ac-

quis in relation to energy consumer protection,

so as to provide mechanisms for the protection

of energy consumers in both the electricity and

gas sector with special focus on energy efficiency

improvements;

• Defining and monitoring energy poverty on the

national level;

FIgurE 12 Occurrence of draught and mould in visited households in BiH

Mould visible

26%

74%

Yes

No

25%

46%

29%

Yes

No

22

Croatia

General information

In 2012, the largest changes in consumer costs in Croa-

tia happened in energy and food prices. Energy prices

increased by 10.5% in 2012;in fact the rise of the cost of

electricity (16.4%) and natural gas (21.3%) had the most

significant influence on the growth of costs in that cat-

egory [43]. The fact that more than a quarter of Croa-

tian households pay their energy bill late is significant

[44]. There has also been a worrying rise in the share of

people with arrears in utility bills (28% in 2010, 30.4% in

2013, compared to 10.1% in the EU28) [45]. Additionally,

29.9% of Croatian households are at risk of poverty or

social exclusion9 (in comparison to 24.5% in the EU28

in 2013) [44]. 13.3% of the population lives in households

with leaky roofs, damp walls, floors or foundations, or

with rotten window frames or floors. The largest por-

tions of household expenditures were related to food

and non-alcoholic drinks, 31.7%, and housing and ener-

gy expenditures, 15.7%. Of that 9.9% was spent on elec-

tricity, natural gas, or other types of fuel. Overall, ac-

cording to results of the survey on household expen-

ditures [46]:

• 9.9% of people lived in households which were

unable to maintain adequate warmth during the

coldest months,

• 30.4% of people lived in households which were

unable to pay bills for communal services on time

during the previous 12 months,

• 68.4% of people lived in households in which the

total housing expenses presented a large financial

burden, while only 2.1% of people lived in house-

holds in which the total housing expenses did not

present a burden of any kind.

9 Basic indicator of poverty which is shown by the percentage of people whose income falls below the level of at – risk for poverty.

Vulnerability and energy poverty in national legislation

In Croatia, there is no all-encompassing definition of

a vulnerable consumer, nor are there methods for de-

fining and monitoring energy poverty; however there

is public policy which concerns (in part) vulnerable

consumers (customers). Additionally, at the moment

there is no program specifically aimed at energy poor

households. The Energy Act (OG 120/12, 14/14) in Cro-

atia has been harmonized with the Third EU Ener-

gy Package, meaning that it relies on setting the cri-

teria for the status of vulnerable consumer of ener-

gy. However, to date, officially adopted criteria which

would encompass the wider vulnerable category have

yet to be written, except for aid for vulnerable house-

holds intended to ease the costs of electricity. In the

Energy Act a vulnerable consumer is defined as a con-

sumer from the household category who, due to their

23

social welfare status and/or due to health status has

the right to receive energy under specific conditions.

The Regulation on criteria for achieving the status of

vulnerable consumer was adopted in September 2015

(OG 95/15). The Regulation states that funding for the

compensation for energy costs of vulnerable consum-

ers shall be secured by way of a solidarity fee, 0.4EUR

cents/kWh, for all final customers, which for the av-

erage household will amount to roughly 0.8 EUR per

month. To date (September 2016) an agreement with

suppliers is in effect in which they forswear profit as

a way to satisfy funding, and as result social compen-

sation for the end consumer is currently set to zero.

It is unclear for how long will this agreement be valid

and at when will the passing of costs to end consumers

take place. Electricity bills already foresee a solidarity

tariff which is, as result of the aforementioned agree-

ment, at the moment set to zero per kWh.

The Regulation regarding the Monthly Amount of

Compensation for Vulnerable Customers of Energy

(OG 102/15) defines that the amount of compensation

for a vulnerable customer is set to an amount not ex-

ceeding 200 HRK (26EUR) per month. On the basis of

the determined status of vulnerable customer, the user

has the right to compensation to help finance electrici-

ty expenses. In the Social Welfare Act (OG 157/13, 152/14)

it is stated that all recipients social welfare (guaran-

teed minimal monthly allowance) have the right to fi-

nancial aid for the purpose of housing expenses and

related bills and heating. Article 43 defines minimal

compensation for households which use wood heat-

ing, on the basis of which they would be provided with

either 3 srm of wood for heating or an approved mone-

tary amount to ease this expense. The decision regard-

ing the manner of compensation is to be made by the

local administrative unit, and be paid out on a year-

ly basis.

FIgurE 13 Extreme energy poverty in Croatia

(Photos by Lasta Slaviček Photography)

FIgurE 14 Number of household members

and building type (N=394)

24

In the Energy Efficiency Act (OG 127/14), in Article 13,

distributors’ obligations for accomplishing energy

savings through measures of energy efficiency are de-

fined. DSOs are required to achieve energy savings by

implementing energy efficiency measures and thus

helping reduce energy consumption for their end

consumers.

In the National Programme for Renovation of Multi-

family Buildings for the period 2013-2020 [47] it is stated

that energy poverty is one of Croatia’s growing prob-

lems which is a consequence of increases in the price

of energy, and, though there is still no clear definition

(of energy poverty) in Croatia, its existence is shown

in the inability of many to maintain adequate heat-

ing. It is recommended that the Ministry of Social Pol-

itics and Youth, as well as local providers of social wel-

fare, become involved in carrying out and co-financing

measures for the most vulnerable citizens and in this

way contribute to a solution to the problem of ener-

gy poverty with which a long-term reduction in state

subsidies for energy expenses for the socially vulnera-

ble can be secured. Additionally, the Programme states

that in carrying out these measures, local administra-

tive units, together with local providers of social wel-

fare and competent bodies should envisage providing

additional funding for the socially vulnerable, of up to

85% of the total investment expenses.

Individual legal documents do not directly speak

about energy poverty; however they contain the legal

basis upon which funding can be directed to, among

other things, the fight against energy poverty. As such,

in the example of article 100 of the Air Protection Act

(OG 130/1, 47/14) it is stated that financial means ob-

tained from the sale of emission units by way of auc-

tions in the EU Emissions Trading System shall be paid

into a special account of the Fund for Environmental

Protection and Energy Efficiency. Financial funding

obtained in this way is to be spent in accordance with

the plan to be finalized by the Government as per the

recommendation of the competent Ministry, and one

of the stated possible applications of said funding is

the financing of energy efficient measures and insu-

lation, e.g. for securing financial aid to resolve social

problems in households with low to middle income.

A glimpse into reality

The Croatian case-study involved surveying a total of

394 households in Sisak-Moslavina County10. Sisak-

Moslavina County was chosen as it is one of the poor-

10 Field visits were undertaken within the projects REACH and With knowledge to warm home.

FIgurE 15 Heating systems

in visited households in Croatia

FIgurE 16 Insulation type with

example of typical building of an

energy poor household in Croatia

25

est counties and it is not far from the Croatian capi-

tal, Zagreb. The majority (60%) of households visited

had three or more household members living primar-

ily in family houses built before 1990. The average liv-

ing space was 72 m2 out of which 55m2 are heated. It is

important to note that for living space only estimates

provided by household members have been used, not

real data. The difference between overall living space

area and area which is heated in winter months occurs

as many households are forced to reduce their living

space in winter as result of inadequate access to heat-

ing services and inability to afford needed heat.

Similar results were shown by research undertaken

in 2012/2013 on sample of 1,722 respondents random-

ly chosen via phone survey across the whole of Cro-

atia [48], [49] where 22% of households reported they

reduce their living space in winter months, primar-

ily as result of inability to afford the needed energy

(55%) and because of lack of heating systems in cer-

tain rooms (22%).

Average consumption of electricity for a household

based on results of survey (N=394) amounts to 4,475

kWh/annum, which is higher than national average

which in 2012 was in 3,766 kWh/annum for entire Cro-

atia, and 3,551 kWh/annum for Sisak-Moslavina Coun-

ty (calculated from [46], [50]). Average heat consump-

tion is 23,362 kWh/annum, double of the national aver-

age from 2012 which was 10,889kWh/annum and sim-

ilar to the average of Sisak-Moslavina County in the

same year – 23,209 kWh/annum.

Most dwellings have no building insulation whatsoev-

er. Windows and doors are also inefficient, with single

glazing or double single glazed windows, and heating

is mostly done by a single inefficient stove.

Individual wood stoves and inefficient old central

heating systems without the possibility of regulating

temperature or distributing heat evenly across rooms

result in high energy consumption and adverse im-

pacts on health. In addition to the indoor pollution,

inhabitants are exposed to a continuous flow of cold

air through windows and doors, and high levels of

damp and mould. Poor insulation, inefficient heating

systems and draught result in uneven distribution of

indoor temperatures within rooms and across rooms.

Key steps for Croatia• Widen the definition of vulnerability from focus-

ing only on electricity to gas, district heating and

fuelwood, and shift the focus from a solidarity tar-

iff towards energy efficiency improvements;

• Define energy poverty for Croatia and implement

statistical monitoring;

FIgurE 17 Share of households exposed

to draught and mould in Croatia

26

Kosovo

General information

With per capita GDP estimated at around €3,000, Ko-

sovo is one of the poorest countries in Europe. Its av-

erage per capita income is about one-tenth that of

EU levels. According to the World Bank’s methodolo-

gy about 80%of the population is below the poverty

line. Using the domestic poverty line of €1.72 per day

(2011 data) as defined by the Kosovo Agency of Statis-

tics, 29.7 % of its population of 1.8 million are consid-

ered poor [51]. Kosovo also has the highest unemploy-

ment rate in Europe [52].

At the same time, prices of energy in Kosovo have

gone up several times during the past decade and in

2012 alone, electricity bills increased by 8.9% [53]. Most

households use either wood or electricity for heating.

Coupled with inefficient housing stock, Kosovars are

faced with high levels of energy related costs. Electric-

ity supply is unreliable [54] and both use and produc-

tion are inefficient. In combination with high rates

of poverty and unemployment, this leaves many in

harsh living conditions unable to meet their basic en-

ergy needs. According to Agency of Statistics of Kos-

ovo, about 38% of the family costs are spent on food,

while about 31% on accommodation costs, where the

energy bill is one of the main components of the cost

[53]. Kosovo also has high rates of electricity theft,

tampering with meters, delays in meter installation

and false readings of electricity meters. This results in

high commercial losses and questionable data on actu-

al electricity consumption [55]. Energy efficiency and

renewable energy can help to mitigate projected pow-

er shortfalls, while enhancing Kosovo’s energy securi-

ty and environmental sustainability [52].

Vulnerability and energy poverty in national legislation

Kosovo has a general definition of vulnerable custom-

er related solely to electricity usage for household cus-

tomers whose low level of income, ill-health or disa-

bility qualifies them for protection or assistance ac-

cording to rules set by the Energy Regulatory Office

on the basis of qualifying rules established by the Min-

istry of Labour and Social Welfare. There is no defini-

tion of energy poverty. Vulnerability is regulated in

such a way that customers who are recipients of so-

cial aid as defined by the Law on the Social Assistance

Scheme (OG 2003/15) and the Law on the Status and

Rights of Families of Martyrs, Disabled People, Veter-

ans and Members of the Kosovo Liberation Army and

Families of Civil War Victims (OG 04/L-054) have the

right to a cheaper tariff for the consumption of elec-

tricity for personal use. There are no specific support

schemes for vulnerable energy consumers; only the

aforementioned type of general social welfare, which

to a certain extent can be used for energy purposes.

Yearly about € 4.5 million in subsidies are used for cus-

tomers that are under social aid. About 10% of house-

holds meet the criteria for subsidies related to electric-

ity consumption.

The Law on the Energy Regulator (OG 03/L –185) re-

quires protection of vulnerable consumers (as defined

above). The law grants the possibility of providing sub-

sidies to vulnerable consumers (Article 45). It does not

discuss in details the types of subsidies or mechanisms

for implementation. The Law on Energy Efficiency

(OG 04/L-16) does not specifically refer to energy pov-

erty or vulnerable consumers, but it does set the ba-

sis for undertaking energy audits in buildings, which

could offer an opportunity for assessment of building

stock and supporting energy efficiency measures tar-

geted specifically for the energy poor in future. The

Law on Electricity (OG 2004/10), Article 32, states that

27

suppliers have the right to cut off customers for non-

payment, consistent with the rules and regulations is-

sued by the Energy Regulatory Office regarding the

protection of vulnerable persons and cut-offs dur-

ing the winter season. This type of non-financial sup-

port is providing protection against disconnection for

those vulnerable customers defined by the rules pre-

scribed by the regulatory authority.

The Energy Strategy of the Republic of Kosovo 2013-

2022 is the main document outlining energy policies

and development objectives of the energy sector. This

Strategy was developed based on a review of its pre-

decessor, the Kosovo Energy Strategy 2009-2018. The

Strategy states that subsidies for electricity prices

will continue so to minimize impacts of price increas-

es, and that the measures needed will be taken to pro-

tect those who are affected by the developments of en-

ergy sector.

The Second Energy Efficiency Action Plan for Kosovo

(2013-2015) emphasizes that key financial constraints

for implementing energy efficiency measures are the

lack of affordable energy efficiency financing schemes

for lower income households unable to access the loan

market and the high level of commercial losses and

non-payment of energy bills..

A glimpse into reality

To gain insight into the living conditions of energy

poor people in Kosovo, ten households were visited in

Obiliq Municipality and their energy and living condi-

tions were discussed. The selection of the households

was done based on recommendations by the Obiliq

Municipality representatives. Most of those visited

were families living in a family house with on average

6.6 family members. The dwellings in which they were

living had no, or in some cases only partial, insulation

with single glazed and aged windows. Similar results

have been reported in other previously undertaken

studies on larger samples giving more quantitative in-

sights – all clearly indicating that the building stock

is highly inefficient and with questionable indoor air

quality (see Figure 18) [53] [56] [57] [58].

For the ten visited households, the yearly cost of elec-

tricity for a household is 340 EUR, and for fuelwood

260 EUR. This means that households with an average

monthly income of 224 EUR would have to spend more

than 13% of their total income on electricity only, and

for fuelwood and electricity combined more than 22%.

This is actual spending. Calculated spending needed

for achieving desired levels of thermal comfort is like-

ly to be higher.

FIgurE 18 Insulation in

households in Kosovo [53]

No 64%

Yes 33%

Don‘t know 3%

No 53%

Yes 46%

No 70%

Yes 26%

Don‘t know 4%

roof insulation Double windows Insulation of walls

28

Based on previously undertaken research in Kos-

ovo, the monthly cost of electricity was even high-

er amounting to more than 515EUR yearly, and more

than 550 EUR on fuelwood [56] [58]. “Consumers are

price sensitive to which energy source is used. An in-

crease in electricity price, from one tariff block to the

next, results in a 58% decrease in electricity as a share

of energy demanded... The share of electricity that

could have been consumed at the higher price is re-

placed by a 7% increase in wood fuels, and 18% increase

in lignite quantity demanded “[56]. In recent years as

result of inability to cope with increasing energy costs,

many households are shifting to increased use of bi-

omass and coal with fuelwood consumption increas-

ing from 2.41 srm per year to 7.3 [52]. Similar amounts

were used by the ten visited households, whose aver-

age fuelwood consumption was 7.4 srm yearly. If the

current trend continues Kosovo will be facing severe

deforestation issues. At the same time the only alter-

native for many is to use electricity, which is expensive.

For the ten households that were visited, average year-

ly consumption of electricity amounts to 6.462 kWh,

which is already high, compared to the EU average,

and statistics indicate even higher rates of electrici-

ty consumption. All the surveyed households have re-

ported that they have difficulty in paying their ener-

gy and water bills. All of the households visited also

noted they have visible mould and most of them have

constant draught through windows and doors. Those

findings are in line with the larger survey (N=605)

undertaken in 2014, where 44% of households had

draught around their windows and doors, and most-

ly heated by wood burners mostly heating only about

40% of their living space [58].

Key steps for Kosovo• Define vulnerable energy consumers and design

mechanisms for support focusing primarily on

energy efficiency measures;

• Define energy poverty and ensure statistical

monitoring;

• Provide publicly accessible statistics on energy ex-

penditures and living conditions;

FIgurE 19 Composition of final

household energy consumption

in Kosovo (2014) [59]Solar energy 0.1%

gained heat 1%

Coal 4,7%

Biomass 46.9%

Petroleum products 3,7%

Electricity 43.6%

29

Macedonia

General information

According to the results of the state Survey on Income

and Living Conditions for 2014, the percentage of the

population at risk of poverty has decreased from 26.2%

in 2012 to 24.2% in 2013 to 22.1% in 2014. However, the

percentage of the households which had issues with

leaking roofs, damp walls, floors, foundation or rot in

window frames or floors has rose from 14.1% in 2012 to

15.3% in 2014. Also the number of those who felt that

their homes were too dark has actually increased from

4.2% in 2012 to 4.5% in 2014. The same survey also finds

that 9.8% of all employed persons are poor, 40.4% of all

unemployed, 8.4% of all pensioners and 26.1% of other

inactive persons are poor [60].

Macedonia has an unemployment rate of 24.4%, and

it is important to note that only 39.9% of able-bod-

ied women are employed compared with 60.1% of the

male workforce. This is important as women are more

likely to suffer from adverse impacts of energy pover-

ty, as they spend more time in inadequate conditions

at home [61].

The signing of the Memorandum of Understanding on

Social Issues in the context of the Energy Community

created the legal basis for development of the energy

poverty concept in the Macedonian legislation and for

undertaking measures for protection against energy

poverty. Although there is no official definition of en-

ergy poverty, in Macedonia the term “energy poverty”

is mentioned within existing energy legislation. This is

unlike most SEE countries.

Vulnerability and energy poverty in national legislation

One of main goals of the Strategy for Energy Devel-

opment (OG 61/2010) is that a programme for sup-

port of socially vulnerable consumers is prepared

and implemented, showing that energy poverty is rec-

ognized as a priority issue. This Strategy also clari-

fies that the current price of electricity subsidizes all

households, meaning that the poorest 20% receive

only 3% of the subsidies. Therefore, reaching the mar-

ket price of electricity is in the Strategy set as a pre-

condition for better protection of socially vulnerable

consumers and reducing energy consumption.

The Strategy mentions two models for supporting so-

cially vulnerable consumers of electricity: block tariffs

and targeted subsidies. Block tariffs introduce a low

electricity price (below the real costs) for socially vul-

nerable households which will be compensated by a

higher electricity price paid by other consumers. Tar-

geted subsidies are in the form of vouchers with which

socially vulnerable consumers pay for electricity. A

FIgurE 20 Number of household members and type

of building for vulnerable in Macedonia (N=206)

30

weakness of both models is objectively determining

socially vulnerable consumers. This Strategy recom-

mends the second model so that, instead of vouch-

ers, the bills are to be directly subsidized with budget

funds for recipients of social welfare. In addition, the

Strategy recommends that the state finance energy ef-

ficiency improvements for socially vulnerable house-

holds, as well as supporting the residential energy ef-

ficiency of middle-income households in order to pre-

vent a drop in their standard of living. The Strategy es-

timates that 15-20 million EUR in budget funds should

be spent for realizing the social energy programme.

The Energy Law from 2011 mentions energy poverty in

Article 9, which says that the energy policy should en-

able inter alia measures for protecting citizens against

energy poverty. This Law also dedicates a whole article

only to energy poverty: Article 14: ”For the purpose of

implementing the social protection of citizens against

energy poverty, the Government of the Republic of

Macedonia on request of the Ministry in collaboration

with the Ministry responsible for social affairs, adopts

an annual programme for reducing energy poverty in

which, among other things, provided are: subsidies for

energy consumption and for energy sources for sepa-

rate households; the types of energy and energy sourc-

es that will be covered with the subsidy; more efficient

usage of energy, the means of implementing the meas-

ures, budget sources and other funding measures; and

the bodies responsible for the implementation of the

measures.”

In 2010 the subsidy for energy consumption (electric-

ity, fuelwood, coal, light heating oil for households/ oil

for households and district heating) of 600 denars (9.8

EUR) per month was introduced, targeting households

entitled to social welfare and to permanent financial

support. The eligibility requirements say that the con-

sumers need to have paid for the energy consumed in

the duration period of the programme and that they

will lose the right to this energy subsidy in case they

are not entitled to social welfare or permanent finan-

cial support. This measure continued in 2011 and in

the first half of 2012. Since August 2012 the month-

ly amount has risen to 700 denars (11.4 EUR), accom-

panied by the explanation that from this subsidy ap-

proximately 20,000 households have benefited so far,

and that with this increased subsidy the households

can cover about 170 KWh electricity, or about 50% of

their entire consumption. This measure continued in

2014 and 2015 as well. In 2015 the amount subsidized

was 700 and 800 denars – 700 denars to cover bills from

1 January to 30 June 2015 or 800 (13 EUR) to cover bills

from 1 July to 31 December 2015. The total amount

dedicated for this measure in 2015 was 1,309,620 EUR.

These funds are sourced from the state budget.

The Program for Realizing the Strategy for Energy

Development (OG 50/2013), which is the action plan

for the Strategy for Energy Development, envisaged

a more complex set of measures addressing socially

vulnerable consumers. One measure was a subsidy

program for replacing the old stoves and purchase of

new efficient stoves especially for socially vulnerable

households, to take place in 2012-2013 under the Min-

istry of Economy. It also envisaged an increase of the

subsidy in the Program for Subsidizing Energy Con-

sumption. Other planned measures include education

and promotion of energy efficiency, financial support

for households ready to invest in energy efficiency, tax

reductions for investing in energy efficiency as effi-

cient biomass stoves, solar collectors etc. The Renewa-

ble Energy Strategy does not tackle the matter of ener-

gy poverty into detail. However, when discussing bio-

mass, it mentions that there should be subsidies for re-

placing old stoves and purchase of new efficient stoves

especially for socially vulnerable consumers.

The Energy Efficiency Strategy (OG 143/2010), which

stipulates a target of 9% energy savings in the final

energy consumption until 2018 compared to the av-

erage energy consumption in the country in the pe-

riod 2002–2006, is more devoted to socially vulnerable

consumers. It clearly identifies energy efficiency as

an optimal measure for dealing with energy poverty.

The envisaged social measures are improving energy

31

efficiency in social housing, block tariffs for electrici-

ty, as well as introducing metering in district heating,

replacement of fuelwood stoves with energy efficient

stoves, solar systems, introducing energy codes for

buildings and similar. Social housing is also prioritized

in this Strategy. The Government is to take a leading

role in implementing this Strategy and funds are to be

provided inter alia from the Energy Efficiency Fund.

The 1st National Energy Efficiency Action Plan

(NEEAP) clearly states that the targeted social assis-

tance for low income citizens and the construction of

social housing for most vulnerable households is a sig-

nificantly more appropriate solution to energy afford-

ability in the long run than subsidies. It has also en-

visaged an ambitious project – 7000 social dwellings

until 2020 with applied energy efficient measures for

socially vulnerable households. The NEEAP also envis-

aged the adoption of secondary legal acts on energy

efficiency in the building sector. It also states that the

introduction of new highly efficient stoves will reduce

fuelwood consumption. The NEEAP also emphasized

the need for further awareness rising through infor-

mation campaigns on measures for improving energy

efficiency. Regarding finances, subsidies for solar col-

lectors and the establishment of an Energy Efficiency

Fund are also foreseen.

The 2nd NEEAP identifies the main objective of energy

efficiency policy – and the overall energy sector – as

ensuring sustainable development of the state in gen-

eral and the energy sector. One of the conditions for

that is, according to the Action Plan, protecting vul-

nerable consumers due to increasing energy prices.

The National Strategy for Poverty Reduction and So-

cial Exclusion requires setting up indicators for mon-

itoring energy poverty, the variables which condition

energy poverty as well as an index of energy pover-

ty, while demanding the implementation of meas-

ures to lower or abolish the causes of energy pover-

ty [62]. Most of the energy efficiency measures are im-

plemented on the local level and are the obligation of

municipalities. However there is no official data on the

average yearly rate of implementing energy efficiency

measures on national or local level.

Unlike the laws on the energy sector, The Law on So-

cial Protection (OG 79/ 2009) only states that preven-

tion and reduction of social risk for the public must

be ensured by implementing measures for subsidizing

energy consumption and other communal services.

Glimpse into reality

Information about energy consumption and living

conditions was assessed for 206 households in Mac-

edonia11. The selection of the households was done

in collaboration with Red Cross of Gazi Baba Mu-

11 Field visits were undertaken within the project REACH by Macedonian Center for Energy Efficiency http://macef.org.mk/

FIgurE 21 Occurrence of draught and

mould in Macedonian homes (N=206)

32

nicipality where most of the visits have taken place.

Analysis of the collected data shows that most of the

households visited have three to five family members

that mostly live in a family house built 35 to 60 years

ago (59%) (Figure 20).

Similarly as in other countries most households

choose to reduce their living space in winter so out

of an average 85 m2 of living space, 70 m2 are heated.

40% of buildings have no insulation and 13 % have only

walls insulation in different standards. Combined with

mostly stove-based fuelwood heating (47%) or electri-

cal heaters (18%) this shows high levels of inefficiency

and waste of heat energy. The average visited house-

hold uses 5,295 kWh of electricity as compared with

national averages of 5,423 kWh (Figure 3). The house-

holds visited on average use 12,571 kWh of heat ener-

gy annually, which is twice lower than in the Croatian

case study. This can likely be attributed to a warmer

climate.

Similar to other countries with a warmer and drier cli-

mate, mould does not appear to be an issue even in the

the energy poor homes. However, draught, resulting

primarily from an inefficient building envelope (no in-

sulation) and single old windows, is present in 45% of

the investigated homes.

Key steps for Macedonia• Broaden the definition of vulnerability to target

electricity, gas and fuelwood consumers and shift

the focus from financial measures to supporting

energy efficiency improvements in the homes of

vulnerable households;

• Define energy poverty to enable monitoring of the

impact of implemented measures

Montenegro

General information

Similarly to other countries in the region, Montene-

gro’s energy sector development has been marked

by continuous increases of energy prices and the ex-

istence of an energy-inefficient housing stock. In ad-

dition, from the 1990s to the beginning of the 2000s

there were low levels of investment in all segments of

the energy sector [63]. All of this has contributed to in-

creasing the burden of energy costs for many families.

Thus, one of the key goals of Montenegro’s energy sec-

tor development is ensuring protection of vulnerable

consumers. With a poverty rate of 8.6% [64] it is like-

ly that there are many people who are facing extreme

energy poverty.

Montenegro has a high level of electrical heating (68%)

with the other main source of heating being fuelwood

FIgurE 22 Building type and number of household

members in households visited during 2016 in Montenegro

33

(25%) [65]. Both are typically inefficient and costly. Im-

portantly the cost of electricity-based heating and

fuelwood heating during the winter is similar, leaving

many options with limited options for fuel switching

to reduce energy costs. As result of high energy costs

many households (70.5%) are unable to pay their util-

ity bills on time. On a yearly basis the average electric-

ity debt per household is 400 EUR [63]. According to

the household budget survey 74% of all households

still have in use a solid fuel stove, while almost 98%

also have electrical stoves. Additionally about 17% of

households have various electricity fuel heating devic-

es and more than 96% use electricity for heating do-

mestic hot water (electrical boilers)[65].

Vulnerability and energy poverty in national legislation

Montenegrin legislation partially addresses energy

poverty related issues, mostly by defining socially vul-

nerable groups and providing support in form of sub-

sidies and education on energy efficiency. The only

mention of energy poverty as a term has been noted

in the Montenegrin Report on the Analytical Overview

of Harmonization of Legislation (Chapter 15) (2013) [66].

The Report states that protection of consumers is en-

sured through various measures applicable to ener-

gy providers as well as through measures for tackling

energy poverty. The report notes that since 2008 Mon-

tenegro has had a system of subsidies in place for the

protection of socially vulnerable households. It is un-

clear from the report which measures are specifically

targeting energy poverty.

As in other SEE countries, the Social Action Plan (2010)

was the first document to legally require protection of

vulnerable groups with the aim of decreasing and pre-

venting energy poverty. The National Programme for

Protection of Consumers 2012-2015 puts an emphasis

on energy efficiency. It also foresees a strategy for pro-

tection of small energy consumers, including house-

holds, to ensure a secure and uninterrupted supply

of energy. The Programme furthermore states that

special tariffs will be designed in cooperation with lo-

cal authorities in order to protect vulnerable energy

consumers.

The requirement for protection of vulnerable consum-

ers is further developed within the new Act on the En-

ergy Sector (OG 05/2016). Article 198 states that vul-

nerability criteria are defined based on health status

of household members (disability, bad health which

could result in death if supply of energy is interrupt-

ed). Vulnerability status can also be acquired based on

social status. Government defines the levels of subsi-

dies for those who acquire vulnerability status, while

also setting up a monthly limit of electricity and gas

FIgurE 23 Family

house of energy poor

in Montenegro taken

during the field visits

34

consumption by which the subsidy can be applied. The

Act also forbids disconnection of users who have ac-

quired their vulnerability status based on health con-

ditions at any time, and for those who have acquired

vulnerability status based on their social status from

beginning of October until end of April, regardless of

arrears or non-payment.

Montenegro also has a National Energy Efficiency Ac-

tion Plan for the 2013-2015 period, which, although not

specifically addressing energy poverty or vulnerabil-

ity, sets an important basis for promotion of energy

efficiency which could then to a certain extent be di-

rected for vulnerable groups in future. The Energy Pol-

icy of Montenegro until 2030 (2011) foresees the defini-

tion and implementation of a subsidies programme for

vulnerable customers of electrical energy and gas in

line with the Act on the Energy Sector. These subsidies

should be used to ensure the provision of the required

minimum of energy and living conditions.

A glimpse into reality

In Montenegro, 101 households were visited in Podgor-

ica in 2016, with the aim of collecting data on energy

consumption habits, financial circumstances and liv-

ing conditions, as well as providing households with

low-cost energy saving tools12. Households have been

selected based on a vulnerability status and with sup-

port of the Red Cross Montenegro.

The data collected shows that most households have

three to five household members, which is similar to

the results of the field visits undertaken in other coun-

tries of the region, and most dwellings were privately

owned family houses.

The average yearly electricity consumption per house-

hold for these 101 households was 6,623 kWh which is

almost 10% more than national average electricity use

per household in 2014 – 6,065 kWh. 60% of the house-

holds visited use electricity for heating with the re-

maining ones using fuelwood (on average about 8.5

srm per year). The average monthly income of sur-

veyed households was about 640 EUR, while they had

to spend about 53 EUR solely on electricity bills.

It is interesting that a relatively low incidence of

mould was reported. This can perhaps be explained by

the drier climate of areas where the surveyed house-

holds lived.

Key steps for Montenegro• Widen the definition of vulnerability to electricity,

gas and fuelwood and shift focus to a wide scope

of energy efficiency measures targeted at vulner-

able households;

• Define energy poverty and monitoring progress in

national statistics;

12 Field visits were undertaken within the project REACH CEI. All visits were realised in cooperation with students and teach-ers of technical school “Vaso Aligrudić” from Podgorica.

FIgurE 24 Occurrence of draught and

mould in the households visited

35

Serbia

General information

In Serbia most of the buildings were built before 1962

(59%). A high share of the dwellings consists of build-

ings constructed between 1962 and 1991 (36%), which

exhibit a high final energy demand and oversized sec-

ondary heating installations [67]. During Serbia’s pri-

vatization process in the 1990s, state-owned apart-

ments were sold to the tenants free of tax and trans-

action costs, leading to an increased share of privately

owned housing; today most residents (97.3 %) are living

in apartments owned by one of the household mem-

bers. Rented social housing is not common. Apart-

ments are usually rented by households living above

the poverty line and the majority of households be-

low the poverty line (85%) live in individual houses

(primarily self-built) and 9 % live in residential build-

ings [67].

More than 50% of electricity use in Serbia can be at-

tributed to the household sector, and most of the

households rely on electricity for domestic hot water.

The average Serbian household uses over 4,700kWh

of electricity annually which is in line with the situ-

ation in other SEE countries and higher than Europe-

an average. There is a high rate of non-payment to en-

ergy utilities, and arrears on utility bills are common.

Households in Serbia spend a monthly average of 11.3%

of their total disposable income on household energy

expenditure [68]. The relatively high costs of energy, as

compared to available income, undeveloped and inef-

ficient heating systems and inefficient building stock

are culprits for the likely high prevalence of energy

poverty in Serbia [69].

By making progress in aligning its legislation with the

EU acquis, Serbia has gone furthest in the region in its

attempts to create a protection scheme for people vul-

nerable to energy related costs.

Vulnerability and energy poverty in national legislation

The Serbian state energy strategy until 2025 (OG

101/2015) notes that measures for improving living

conditions for socially vulnerable consumers of ener-

gy have been set up and will be further developed. The

Act on the Energy Sector (145/14) defines a vulnerable

energy buyer as a household which as result of its so-

cial status or health conditions has the right to provi-

sion of energy under specific conditions. The Act states

that a vulnerable customer of energy, referring to elec-

tricity or natural gas, is a customer from the house-

hold category living in a residential unit with a single

metering point. A household may acquire the status of

an energy vulnerable customer at its own request if 1)

it belongs to the category of citizens with the lowest

earnings per household member, taking into account

all the household members and entire immovable

property in the country and abroad; 2) it does not own

or use another residential unit other than a residen-

tial unit whose structure and surface area match the

household’s needs, pursuant to the law regulating the

social housing area. The status of an energy vulner-

able customer may also be obtained by a household,

at its own request, if the life or health of a member of

FIgurE 25 Deteriorated buildings with poor insulation

in Serbia (Photo documentation of Fractal, 2016)

36

such a household can be jeopardized by the interrup-

tion of electricity or natural gas supply due to his/her

health condition.

The status of an energy vulnerable customer may also

be obtained on the basis of a request submitted to the

local authority, which issues a decision on obtaining

the status of an energy vulnerable customer. An ener-

gy vulnerable customer is entitled to electricity or nat-

ural gas supply with a reduction of the monthly pay-

ment. Article 364 defines a vulnerable consumer of

thermal energy. An electricity customer supplied with

thermal energy may acquire the status of a vulnera-

ble customer under the conditions and in the manner

prescribed by the act under Article 10, or in accordance

with a separate law or an act of the local authority.

The Ordinance on Vulnerable Buyers of Energy en-

tered force as of January 2016 (OG05/2016). Although

its aim can be attributed to efforts to fight energy pov-

erty, there is no mention of energy poverty in the doc-

ument itself. The Ordinance sets vulnerability criteria

based on the household’s monthly income, number

of household members, means test and health status.

A vulnerable buyer is entitled to subsidies for monthly

energy bills (electricity and gas). The monthly income

thresholds for eligibility are defined by the Regula-

tion on harmonized amounts of household’s month-

ly income as eligibility criteria for acquiring status of

vulnerable energy buyer (40/2015).

TABLE 1 Maximum monthly household income and amount

of electricity which can be compensated through subsidies

No. of household members

Total monthly income

Monthly subsidy (kWh)

112,900 RSD

(105 EUR)120

2–318,786 RSD

(150 EUR)160

4–524,672 RSD

(200 EUR)200

≥630,558 RSD

(250 EUR)250

The Needs Assessment Document 2014 – 2017 for the Re-

public of Serbia defines energy poverty as households

inability to afford basic energy services, primarily heat-

ing, at reasonable cost, as compared to their income.

The National Strategy on Social Housing (OG 13/2012)

defines “housing poverty” which can to some extent be

comparable to energy poverty. The document states

that housing poverty is excluded from the social pro-

tection system and no measures have been defined for

protection of vulnerable consumers that lack sufficient

funding for ensuring minimum housing standards. The

absolute poverty line, to which social policy common-

ly refers to in Serbia, does not include imputed rent in

the costs of housing. In 2009 6.6% of all households had

to use more than 50% of their income to cover housing

costs. As housing costs include costs of electricity and

heating, this data may indicate a high prevalence of en-

ergy poverty. Neither the Act on Social Housing nor the

Act on Housing recognizes energy poverty as an issue,

nor do they discuss energy vulnerability.

The Poverty Reduction Strategy of Serbia (2003) sug-

gests that the poor should be protected with the aid

of tariff system reform within the electricity sector. All

prices should reflect actual costs, and the most vulner-

able households should be supported by direct sub-

sidies. It is interesting to note that unlike most simi-

lar legislative documents from the region, this Strat-

egy specifically states that subsidies should be given

with the condition that energy is used rationally. Fur-

thermore, the Strategy foresees financial support for

switching to cheaper heating sources as well as for set-

ting up mechanisms for increasing energy efficiency.

Although the Strategy states that detailed goals and ac-

tivities for decreasing energy poverty are described in

the Annexes, those do not seem to be publicly available.

Energy poverty is inadequately recognized as an is-

sue at the local level. Research of available documents

showed that only the city of Valjevo seems to have

eradication of energy poverty in its vision. Valjevo is

striving to ensure that all households in its vicinity are

37

able to meet their heating requirements while being

left with sufficient funds for other necessary expenses.

A glimpse into reality

In Serbia ten households were visited as a part of a larg-

er ongoing study13. Overall, 100 visits to households are

planned and the results will be available by end of 2016.

Ten visits were carried out in three Belgrade municipal-

ities: Palilula, Zvezdara and Savski venac. The selection

of households was done in close cooperation with the

municipal departments of the Belgrade Centre for So-

cial Welfare based on their social welfare status.

Poor living conditions and low level of knowledge on

the potential of rational energy use and low-cost ener-

gy efficiency measures which could help them use less

energy were noted by the staff undertaking the visits.

All ten households visited were situated in deteriorat-

ed dwellings (see Figure 25) with alarming levels of en-

ergy poverty visible.

A commonly seen sight on the streets of Belgrade, fa-

cades of buildings are damaged and problems of mold

are clearly visible, especially on the ground level and

in the basement. Pipes and heating installations are in

most cases not insulated, increasing the unnecessary

losses of energy and costs for homes. Mold is present

and lighting is poor. The same case was noted in ten

visited households.

The situation inside the homes can be described as a

lack of resources and lack of adequate information. Al-

though ten households is too small a number to draw

13 Field visits were undertaken within the project REACH CEI by Fractal from Belgrade, Serbia.

overall conclusions, the findings can be illustrative of

the severity of the situation of those who are faced

with energy poverty in Serbia.

For the members of the ten visited households, paying

energy bills regularly presents a considerable problem

and requires cutting most other household necessi-

ties. By paying irregularly or not being able to pay at all,

they fear that their electricity will be cut off. In terms

of energy consumption behaviour, while there is a sig-

nificant potential for improvement of habits, it must be

stressed that the representatives of visited households

show a genuine interest and put significant effort into

achieving a balance between keeping energy consump-

tion low and trying to maintain sufficient warmth for

health and enough energy for basic everyday activities

(cooking, lighting, hot water, etc.). However, because of

the poor financial situation and lack of information

that is suitable to the specific situation in their homes,

they lack solutions for improvement. A detailed analy-

sis of energy consumptions and costs will be published

after the fieldwork data collection and processing.

Key steps for Serbia• Design specific energy efficiency measures and

implement within the vulnerable groups;

• Set monitoring of vulnerable consumers on a na-

tional level and enable state centralized support;

• Define energy poverty and ensure statistical mon-

itoring with publicly available data on energy ex-

penditure and living conditions;

FIgurE 26 Common issues in the homes of energy poor

people in Serbia (Photo documentation of Fractal, 2016)

38

The adverse effects of energy poverty in SEE

Even if the deleterious consequences of energy poverty

are well known, there has been little focus on analysing

the magnitude of health consequences of energy pover-

ty in the SEE. With the region being particularly vulner-

able to energy poverty as result of inefficient and deteri-

orated housing stock (Figure 30) with poor access to ad-

equate energy services and old and inefficient housing

appliances, it is likely that the consequences for health

are far beyond those commonly reported for Western

Europe. Energy poor households are living in deterio-

rated buildings, with constant draughts through the

poorly insulated windows and doors, damp walls with

mould and dark rooms as a result of inadequate indoor

lighting. The inability to heat homes and the perma-

nent exposure to high levels of damp and mould are the

main culprits for health damage among those living in

energy poverty. Long exposure to high levels of indoor

damp and mould increase risk of asthma exacerbation

FIgurE 28 Number of family members in

visited households in SEE (N=612)FIgurE 29 Occurrence of mould

and draught in SEE (N=612)

FIgurE 27 Commonly seen mould and humidity

(Photo prom Sisak-Moslavina County in Croatia)

39

[67]. What is furthermore worrisome is that marginal-

ized groups, the disabled, elderly, and ill are more likely

to be affected by the consequences of energy poverty

[34]. The analyses gathered during visits to vulnerable

households undertaken in all seven countries indicate

that most of the affected families (50.5%) have three to

five family members, with a significant number of sin-

gle person households14.

Heating is required in all countries of SEE, and many

families are forced to reduce their living space in win-

ter. Multifamily buildings in larger cities are often con-

nected to outdated fuel oil-powered district heating

systems, usually without individual metering or regu-

lation. This means that energy provided is very expen-

sive and inefficient and that families have no ability

to control their own heating bills. Unlike those in pri-

vate houses who are forced to reduce their living space

in winter, in urban residential multifamily buildings

many families are even experiencing excessive heat,

and without thermostats or the ability to turn down

the heating, they commonly open windows to cool

down. This paradox is evident throughout SEE coun-

tries, showing large inequalities between the urban and

rural (energy) poor.

Some countries have started implementing individual

metering schemes to comply with EU legislation. With

the introduction of individual metering many are left

with sky-high bills because they are not familiarized

with energy saving mechanisms. This leads to those

with low income being forced to turn down the heat-

ing. In older buildings which have a chimney system

in place it is not uncommon for households to discon-

nect from the district heating and to shift to fuelwood

and individual stoves accompanied by electric heaters.

This type of heating is common in rural areas, where

fuelwood heating and individual stoves are practically

standard.

14 The results presented hereafter are based on findings from 612 households (out of 833 visited) in which complete and compa-rable quantitative data was gathered: Although the sample cannot be considered representative the results are indicative and can be used for illustrating for the severity or problems en-ergy poor are faced with.

FIgurE 30 Level of isolation,

building type and age in visited

households in SEE (N=612)

40

Inadequate heating coupled with no insulation and

old single glazed windows results in permanent expo-

sure to a cold and damp environment [70] [71]. Mould,

mites, draught, leaking roofs – this is the reality of

life for many in SEE (Figure 29). A distinct problem

of energy poverty is directly related to distribution-

al injustice where poorer and more vulnerable house-

holds live in more deteriorated dwellings and have al-

most no chance to invest in energy efficiency improve-

ments [33].

Health conditions

Over 46% of respondents of the survey undertaken

in SEE (N=612), are suffering from long-term illness,

chronic illness or have certain disabilities, with more

than 17% assessing their overall health as weak.

A significant number of respondents (50%) stated that

in the last four weeks (at the time of the survey) they

had had difficulty in carrying out work or household

activities due to health problems, around 54% had

FIgurE 31 Indicator of illness and indicator of general self-assessment of health

FIgurE 32 Indicators of self-assessment of psychological and physical health (N=612)

41

bodily aches or pain, and around 49% felt unhappy

and depressed. Additionally, in the case of households

from Croatian case study, analysis has shown that

those subjects who are exposed to a continuous flow

of cold air around the window to a significant extent

report worse physical health [72].

Besides the poor material conditions of households and

implication for the physical health of residents, mental

health and wellbeing should be taken into account. Pre-

vious analysis has shown that those users who had dif-

ficulties paying for the heating reported significantly

poorer mental health than those who do not have diffi-

culties in paying heating bills. These initial results indi-

cate the necessity of such research at national level and

suggest the need for further statistical analysis of the

data collected. Despite living in objectively inadequate

conditions, which include all the above-mentioned fac-

tors (permanent exposure to moisture, mould, draught,

inadequate heating systems and energy services,) a sig-

nificant number of respondents – over fifty per cent –

feels completely, very or fairly happy.

Households are often forced to choose between hav-

ing access to adequate amounts of energy and food.

All this clearly indicates that immedi-ate action is needed not only because there is, to an extent, a humanitarian crisis on the rise in certain population groups, but also because investing in

the alleviation of energy poverty means improving the economy and decreas-ing energy import dependency. It also protects the environment and climate by decreasing deforestation rates and eliminating unnecessary CO2 emissions. Immediate action would enable more people to become active members of society and, by removing adverse health culprits, directly decrease national health care costs.

There are almost no downsides of investing in energy

efficiency of dwellings and improving heating systems

while providing access to adequate energy serves.

FIgurE 33 Indicator of personal well-being (N=612)

FIgurE 34 Top: Common improvisation

in attempt to draught-proof old windows;

Bottom: Improvized gas cooking.

(Photo credit: Lasta Slaviček Photography,

taken during field visits in Croatia)

42

Getting out of the dark The ability to afford adequate amounts of energy and

adequate quality of energy services is an important

governance issue and a key social policy concern [73].

As was described in the Country reports, the most

common approach and basically the only attempt to

deal with energy poverty in the region, has so far been

through financial support targeted at socially vul-

nerable groups. While it is good that at least some ac-

tion has been taken – showing govern-

ments’ attempts to address the issue – di-

rect financial support should not be the

first step. It should be a measure of last

resort.

Direct financial support does, to some

extent, alleviate burdens related to high

energy costs. However it only deals with

the consequences of energy poverty, not

with the causes. Families receiving this

kind of support still live in the same

damp, deteriorated, draughty and dark

dwellings, without any options available

that would enable them to change any

of those symptoms. In Croatia, as was de-

scribed, there is a system in place which is

designed to provide direct financial support to socially

vulnerable enabling them a 200 HRK (27 EUR) month-

ly deduction from their electricity bills; money needed

for that is collected through the social levy paid by all

electricity consumers. Even if the agreement between

the electricity distributor and Croatian government

means that the levy is currently set to zero, it is only a

matter of time when the distributor will refuse to give

up their profits and the electricity bills will once again

be on the rise – even for the poor.

Prior to devising any national regulation it is impor-

tant to understand how energy prices are formed, as

well as the main components that determine the final

cost for consumers (Figure 35). As most accessible data

is available for electricity, and as the Croatian example

so far focuses solely on electricity (which has to be not-

ed is a severely limited and exclusive approach), elec-

tricity pricing is used to explain pricing mechanisms.

The main components of electricity price are the costs

of distribution and transmission system network use,

the costs of energy and supply (wholesale and retail)

and, last but not least, taxes and levies.

Between 2008 and 2014, for the EU 28+Norway, average

electricity price levies (various policy support costs,

PSC) increased on average by 170% for households. In

2014, the weight of the levies was almost equal to the

energy and supply component for the average residen-

tial consumer [75]. Energy prices are further influenced

by different taxes and levies, which add more burdens

on final consumers. As it was mentioned, some govern-

ments opt for their policy solutions for energy pover-

ty to be focused on energy prices. This has to be tak-

en with caution because adding additional levies pos-

es a potential risk, without knowing the magnitude of

consequences for borderline energy poverty cases. The

potential spill over of costs to the general population

must be considered very seriously.

FIgurE 35 Elements of consumer energy prices [74]

Consumer price of electricity and natural gas

Energy NetworkTaxes, levies, ex-

emptions, etc.

Who

lesa

le

Tran

smis

sion

Gen

eral

bud

get

Ret

ail

Dis

trib

utio

n

Spec

ific

polic

ies

43

Prior to making decisions to impose additional lev-

ies on the energy price, it is important to consider

that the price consumers pay for electricity and gas

reflects various elements, influenced by both market

forces and government policy. The European Com-

mission states that it is of crucial importance to un-

derstand energy pricing mechanisms and structures

when defining possible financial and legislative frame-

works for tackling energy poverty to prevent passing

on costs to consumers [74]. As is shown in Figure 37,

with the opening and widening of electricity market

the wholesale and retail energy and supply prices have

actually been decreasing. However, that decrease has

been erased by the fast increase of taxes and policy

support costs, resulting in an overall increase in elec-

tricity prices for the final consumers.

It is indispensable to seek corrections to the adverse impacts of energy market liberalization and to avoid policy solu-tions through different taxes and lev-ies on the already burdened household bills.

The first and foremost step in tackling energy poverty

should, thus, involve dealing with main causes of ener-

gy poverty, instead of easing its consequences through

mechanisms whose adverse effects we can only esti-

mate and which have proven to increase overall ener-

gy costs. The principal solution to most energy pover-

ty –related hardships is energy efficiency.

Investing in a whole range of energy efficiency solu-

tions, ranging from simple low–cost energy efficiency

measures as has been done for the households includ-

ed in the visits described, to full retrofitting of build-

ings and improvement of heating systems, has prov-

en to be the best mechanism for alleviating all aspects

of energy poverty. Energy efficiency measures help re-

duce energy consumption and thus decrease energy

while increasing the level of comfort. Energy efficien-

cy helps improve quality of life through decreased air

humidity, leaking roofs and mould; it eliminates cold

draught, resulting in improved health conditions.

FIgurE 36 Electricity price components for

households for the EU 28+Norway [75]

2

The energy & supply component has decreased 7% between 2008 and 2014, while the value

related to taxes and policy support cost experienced a continuous increase over the years (47%),

representing in 2014 36.5% of the total electricity bill on average in Europe.

Graph2

Graph3

€80,9 €76,7 €78,5 €80,6 €77,4 €77,0 €75,2

€46,3 €45,4 €47,7 €49,1 €50,8 €51,5 €54,5

€51,1 €52,7€58,4

€65,5 €67 €72,1 €74,6

0

25

50

75

100

125

150

175

200

225

2008 2009 2010 2011 2012 2013 2014

€/MWh Total Price by Components for Households

Taxes & PSCs Network Energy & Supply

45,4%40% 36,8%

26%26% 26,7%

28.6% 34% 36,5%

0%

50%

100%

2008 2009 2010 2011 2012 2013 2014

% of Total Price by Components for Households

Taxes & PSCs

Network

Energy &

Supply-9

p.p.

+8

p.p.

+0.7

p.p.

44

Improving the energy efficiency of dwellings and of household appliances, while improving the heating and ven-tilation systems is the most effective and sustainable approach to alleviating energy poverty [76] [77] [13] [78] [73] [7].

What is even more interesting is that poorer house-

holds seem to experience greater benefits of such im-

provements [78] and while most of the studies have re-

ported small but significant health improvements it

is likely that even greater health improvements occur

but are not recorded as they appear through longer

time periods than those analysed [79].

Households that have no access to the electricity grid

are facing particular difficulties. In such situations

it is hard to address energy poverty with measures

for improving energy efficiency and hence alterna-

tive programmes for ensuring access to the electricity

network would be needed. In some cases there is a grid

but households cannot afford the connection; in other

cases grid is relatively close but not at the site where

it is needed and in some cases it would not even be

cost-effective to consider grid connections, so install-

ing off-grid PV systems and similar solutions need to

be considered.

While some countries of the region have recently start-

ed providing different support schemes for energy effi-

ciency improvement available for households, energy

poor households typically fail to use available mecha-

nisms because the application documentation is too

demanding and they do not have any funding avail-

able to close the financing gap. Energy efficiency pro-

grammes for energy poor households should be care-

fully designed so that they would be available and ac-

cessible to those in need. It is important to minimize

bureaucracy and if necessary free assistance should

be provided for filling in documentation and applica-

tions for receiving various forms of support for ener-

gy efficiency.

FIgurE 37 Evolution of household price components

from 2008 (European Averages include EU 28+Norway

weighted by consumption of the respective sector [75]

1

Supporting Graphs

Taxes and policy support costs (PSCs) are still pushing electricity prices up for end users. In fact,

between 2008 and 2014, policy support costs (Levies) have increased on average by 170% for

households. In 2014, the weight of the taxes & PSCs component almost equates the energy &

supply component for the average residential consumer. A breakdown of the taxes and PSCs

component shows that taxes (i.e. VAT & excise taxes) still account on average for the largest part

of “non-contestable” charges of the bill.

European Averages1

Graph1

1 European Averages include EU28+Norway, averages are weighted by consumption of the respective sector

81

7775,2

46

51

54,551

6774,6

40

45

50

55

60

65

70

75

80

85

2008 2009 2010 2011 2012 2013 2014

EU

R/M

Wh

Evolution of Household Price Components

Energy & Supply Network Taxes & PSCs

-7%

+47%

+18%

45

Energy efficiency support schemes typically offer

only a percentage of the needed investment, leaving

the poor out of their scope. Lack of funding for ener-

gy poverty abatement measures is a common problem

in the region. EU funding, i.e. through the Cohesion

Funds and the Instrument for Pre-Accession, should

offer funding lines targeted specifically for tackling

energy poverty. On the national level, funds available

through different schemes, i.e. through the Emissions

Trading Scheme and other polluter pays principles,

should also be considered for funding energy efficien-

cy improvements in vulnerable households.

Programmes for increasing ‘energy literacy’ and en-

ergy advising should interlink with other energy ef-

ficiency programmes. Vulnerable groups should be

provided with the information needed to understand

their energy habits and read energy bills. Information

on costs and benefits of different energy efficiency and

energy savings should be available and presented in a

simple manner.

Another important barrier to successfully tackling

energy poverty is that energy efficiency is in the do-

main of energy authorities, while energy poverty is a

social problem. Although it is a social issue, social ac-

tors commonly avoid dealing with it as they perceive

it falls within the energy sector.

It is of the utmost importance to increase awareness that energy pover-ty is a cross-sector issue which needs immediate attention from both social and energy actors. It is a social issue requiring primarily technical energy solutions followed by financial support mechanisms.

It is of crucial importance that energy and social poli-

cies are aligned in the segment of energy poverty, and

that social care recognizes energy poverty as an im-

portant social issue while cooperating with energy ex-

perts in designing adequate policy responses. Energy

poverty is not solely an issue of expenditure as it is of-

ten interpreted; it is a development issue.

Immediate action is needed both on the national EU

level to provide help and support to those in need, and

to alleviate adverse impacts of energy poverty while

eradicating its causes [80]. Although the results of un-

dertaken visits to energy poor households in SEE re-

gion which are presented in this report are indicative

and clearly stress the importance of immediate ac-

tion, it is highly recommended that further detailed

research is conducted using representative samples in

each country. Such research would provide valuable

insights and ensure solid basis for adequate policy re-

sponses in each country.

46

Recommendations

Civil society organizations from SEE SEP propose the following recommendations15:

• Continue discussions to adopt measurable definitions of energy poverty – at the national, regional and EU level

• Develop and adopt national, regional and EU wide indicators for monitoring en-ergy poverty

• Undertake detailed analysis of the problem at the national level in collaboration with national bureaus of statistics

• Ensure publicly available and easily accessible national statistics data on energy expenditures and living conditions (on a yearly basis)

• Improve data collection based on selected indicators so that results could be com-parable between countries, change monitored over time and energy poverty sta-tistics continuously monitored

• Improve definitions of vulnerable groups at national, regional and EU level

Financial support, such as compensation and support for paying the energy bills should be used as a measure after all cost-effective energy efficiency options have been implemented. It should not be the first measure as it does not contribute to overall improvement of quality of life and it does not promote rational energy use.

15 Recommendations build on those presented and discussed during the Conference on Energy Poverty in South-East Europe organized within the project REACH in European Parliament on June 1st 2016 [7] and take into consideration results of pilots implemented in all 7 countries within projects SEE SEP, REACH, REACH CEI and With knowledge to warm home.

46

47

Energy poverty should be included in national programmes, using the following measures as guidance:

• Low-cost energy efficiency and energy saving measures (efficient indoor lighting, draught proofing of doors and windows, reflective foils for radiators, thermom-eters etc.)

• Replacement of household appliances (“old for new”)

• Replacement of inefficient heating system (with use of renewables when possible)

• Different levels of retrofitting building envelope

• replacing windows and doors

• insulating roofs

• insulating walls

• insulating floors

• deep renovation of the buildings whose occupants are vulnerable should be promoted and, if impossible due to the deteriorated state of the building, replacement homes should be ensured.

• Investment subsidies for energy efficiency measures with high co-funding rates and support system for filling out the paperwork and strong eligibility criteria

• minimizing bureaucracy

• No-interest loans mainly for deep renovation

• Refurbishment of all state-owned social housing

• Low energy consumption requirements for all new social housing

• “Energy literacy” campaigns for vulnerable groups

47

48

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